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With Brazil sharply boosting its spending on medicine for public health programs, a Russian biopharmaceutical company has decided to make its first international foray in the South American country.

David Zylbergeld, the company’s CEO in Brazil told The Moscow Times that, the St. Petersburg-based Biocad Pharmaceutical Company intends to open a $40 million facility to manufacture biosimilar versions of a cancer-fighting drug and two other medicines in the southern Brazilian state of Parana in 2015. “We are entering a strategic area for the government, which is to supply the poor with biosimilars for cancer treatment that also represent lower costs to the public purse,” Zylbergeld said.

The Biocad facility will manufacture trastuzumab and rituximab (biosimilars of Roche/Genentech’s Herceptin and Rituxan/Mabthera) and as well as pegylated interferon.

According to Zylbergeld, last year, the Brazilian government spent about $200 million toward acquiring those three drugs, both from the local market and through imports.

In all, the government spent $2.8 billion on public medicine in 2012, and it has pledged to boost the spending to nearly $14 billion by 2016, a year after the Biocad facility opens. Zylbergeld said it was unclear how much money the Health Ministry would allocate toward the three drugs under the expanded spending plan.

Biocad, which was founded in 2001 and is controlled by Gazprombank, has been moving aggressively into the Brazilian market this year. In June, it signed an agreement with a leading Brazilian state pharmaceutical company, the Technology Institute of Parana, or Tecpar, to produce the anticancer drug bevacizumab, which is known commercially as Avastin and came up for grabs when Swiss giant Roche’s patent expired in 2012.

The agreement was approved under a national program to encourage public-private partnerships for the development and production of generic drugs, especially those with biological content like the ones produced by Biocad. Brazil now has 14 partnership projects between public and private companies.

Synergies from the Tecpar partnership will be employed in Biocad’s new facility, said Zylbergeld. The facility will be constructed in Maringa, the same city where Tecpar will build a plant to handle the production of bevacizumab, along with other drugs.

In Brazil, a number of international players, including Roche, Pfizer, India’s Torrent and several Chinese companies, have expressed an eagerness to take advantage of state incentives for the local production of biopharmaceuticals. Selling to the government has its advantages. In addition to guaranteed purchases and payments, there are no additional costs for marketing and retail services.

Biocad also is looking beyond Brazil and is currently carrying out studies on the feasibility of setting up a facility in Argentina, Zylbergeld said. “But we will begin to be global in Brazil,” he concluded.

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